For the longest time, my finances did not align with my values.

In life, we usually are pretty good at knowing when things are askew. When some aspect of our lives doesn’t align well with our values. The problem is that we are also very good at ignoring this sixth sense of ours. And that is what I, like many, did.

And I felt it. Ultimately this misbalance led to burnout largely due to a lack of financial well-being.

Our course, we can get off kilter when any aspect of our lives – our personal lives, professional lives, etc – doesn’t match up with our deeply held values. But this is a largely personal finance blog so that it what we will focus on.

Plus, I will venture to guess that finances are the most misaligned aspect of most peoples lives when you compare it to their values.

That’s the bad news.

But the good news is that there are ways to fix this! As you may recall, I really put myself in a bad financial situation by the time I was finishing training and getting ready to become an attending. But once I started my financial education and began aligning things well in my financial life, it got a whole lot better.

And if I can do it, you certainly can as well!

5 ways I align my finances with my values

I want to preface this with saying that these are my values. And what I mean is that you may read this and think ‘this sounds horrible, I would never do that with my finances.’ And that’s kind of the point!

We will all have different financial and overall values. If we didn’t, it would be really easy for my proscribe what you should do financially. But that doesn’t work at all. Because we have different values to align with our finances.

So, as you read this, keep an open mind. If you find you hold a similar particular value to me, maybe this can help better align your own finances. If not, think about what values you hold closely and how you could better get things in sync financially.

Different strokes for different folks and all.

1. I prioritize saving

A healthy savings rate for any doctor is 20% of your pre-tax or gross income. If you do that and invest in index funds over an average length career, you will reach financial freedom. And, the higher income you earn, the more this becomes true.

With that being said, my savings rate on a month to month basis is around 40%.

And the reason for this is that I value financial security. For a long time, I didn’t have it. My savings rate was 0%. Actually it was worse than that…it was negative. Because I was taking on credit card debt.

Plus, my mindset around money growing up was not healthy. And it ultimately resulted in a scared, scarcity mindset. While I have done a lot of work to fix this and create a healthy money mindset, it is still not perfect.

And this bigger savings rate gives me some cushion and comfort.

I know plenty of doctors who are more in the “die with zero” camp and thus have a lower savings rate. That’s fine. But it will probably never be me.

2. I pay off debt aggressively

Another conservative money view. And things come more into focus.

When I started my financial journey, a huge portion of my 40%+ savings rate went to aggressively paying off debt – credit card debt, student debt, car debt, mortgage debt.

As a result, nearly 4 years later, the only bad debt I have are federal student loan debt that is one payment away from forgiveness and our primary home mortgage. (You will notice I don’t include the mortgages I have on rental real estate as this is maybe the only form of good debt in my opinion).

And even now, we pay an extra $1,000 monthly to the principal of our primary home mortgage to pay it off quicker.

This will make fans of interest arbitrage throw up in their mouths. Because I very likely would have received greater returns on my money if I had invested it in the stock market or in real estate versus paying down that debt.

But guess what? I don’t care!

Because I value being debt free (keep in mind I am not there yet). The #1 financial goal in our written financial plan is to become debt-free. Becoming debt free makes me more financially nimble. It increases my cash flow. Plus, it protects me in the event anything happens to my income (passive or active).

And lastly, paying off debt is guaranteed return on my money. No other investment provides a guaranteed return.

To me this is all huge. Another instance where my finances align with my values.

3. I invest actively…but not like you think

I debated including this one here. Because it is maybe not as much aligning my finances with my values as it is with my personality. But I think that could be splitting hairs and our personality is probably shaped by our values. Regardless, and before I get too philosophical, this is an important point to make.

Humans by nature are tinkerers. Some more than others. I am on the heavy tinkerer end of the spectrum. That probably explains why I became a surgeon.

The problem is that, unlike most endeavors in life, you do better in the stock market the less you actually tinker. I’ve talked ad nauseam and presented a lot of compelling data showing that passive investing strategies (i.e. doing nothing) outperform active stock investing (like timing the market and stock picking) 80% of the time. However, even though we may know this and be smart people, the urge to tinker or feel like we can do better than the market is ingrained in our humanity. It’s why so many investors chase alpha despite it being a sort of white whale.

Back to me. I know myself. And my tinkering. So rather than try to white knuckle it and resist the urge to invest in the stock market actively, I took a different tact. I started to invest in real estate, namely in cash flowing long term rental properties.

Unlike the stock market, the real estate market contains a lot of inefficiencies that an active investor can take advantage of. And I do. To generate greater returns in real estate.

Doing this more than scratches my active investing itch. As a result, I leave my equity investments alone (except for rebalancing once a year) and let the market do its thing over the long term…

4. I keep it simple

I am a huge believer in the K.I.S.S. principle in pretty much all aspects of life. And for those not in the know, that means keep it simple, stupid.

This applies to medicine as well. I’m sure we all remember mentors who could break down complex topics, disease processes or procedures to their component parts so we could understand them. And I’m sure we also remember mentors who could make the same topics seem clear as mud. It always struck me that the simplifiers seemed to actually understand things better.

Same goes in finance. The path to wealth is simple. But that doesn’t make it easy. Because you still have to follow the steps and remain disciplined. And the more complicated you make it, the less you will want to keep up with it.

Even among investors adherent to the principles of passive market investing, making your investments really complicated is not that difficult. I see investors discussing what percentage of their portfolio should be in international funds with a value tilt or municipal versus G-bonds. Fortunately for us K.I.S.S. acolytes, those decisions probably matter very little. And they certainly matter much less than your savings rate.

In fact, I venture that these complexifying (not a real word) investors are letting their “tinker” bone get the best of them. They would be much better off taking a more simplifying approach.

That’s why I recently transitioned from a 5 fund portfolio to the two fund for life approach I describe here…

5. We spend a lot of money

This may be a surprise. Because most people assume that I am super frugal. But I’m not really. Sure, I’m a bit frugal. But I still spend a lot of money.

As a high income earner, I, like pretty much all physicians, am blessed to have much more disposable income more than the average American. That means that 60% of my gross income goes to…well…stuff…like this.

So how does this align my finances with my values?

Well, because I buy stuff according to my values and what I actually like! It sounds like that’s what most people would do. But it isn’t.

Most people spend money very unintentionally. And based on preconceived notions, either their own or others’, of what a doctor should buy. Or in a way that tries to keep up with the Joneses.

And I used to do that as well. Until I aligned my finances, including my spending, with my values. For instance, I’m not a car person. So I didn’t spend a lot of money buying a doctor car. But I did spend a lot of money on a doctor house. Because that better aligned with my values.

See, spending money isn’t bad. In fact, spending it intentionally based on our values like this make it even more valuable to us!

This is also how we ended up at a Taylor Swift concert and a Yankees game suite recently…

But more importantly, what about you?

Hopefully from reading my blog, you can see that there are many paths that will take you to financial freedom. And the best path is the one that you will actually stay on. That means that you really need to optimally align your finances with your values so you can stay on your best path.

So, what are your financial values? How does your written financial plan represent them? Have you given this active thought? Anything you would change or improve?

Take a moment to sit and think about this. I can just about guarantee it will improve your financial well-being!

Need a place to start?! Try these resources:

• Check out my best-selling book, Money Matters in Medicine!
• Watch my Masterclass Webinar on The 12 Steps to Financial Freedom for Physicians here!
• Read my underdog origin story from financial cluelessness to well-being

What do you think? How do you align your finances with your personal and financial values? Share them below!